Costs Budgeting and Costs Management
The importance of getting the budget right simply cannot be overstated! We work in collaboration with you to ensure your budget is accurate as well as being fully compliant with the ever changing CPR rules and Practice Directions. The rules require Budgets to be filed in most Part 7 multi track claims up to £10,000,000.00, however, in any case where the parties are not required by rules 3.12 and 3.13 to file and exchange costs budgets, the court has a discretion to make an order requiring them to do so.
Post April 2013 input from Costs Lawyers at the beginning of the case and during the case will be essential to ensure a realistic budget is submitted to the Court. Failure to comply with filing a budget in time will result in no costs post budget, other than Court fees being allowed, subject to a good Part 36 offer being made.
There are two timeframes that apply to filing and serving Costs Budgets. Where the stated value of the claim on the claim form is less than £50,000.00, the budget is to be filed and served along with the Directions Questionnaire. If the claim is valued at £50,000.00 or more, the budget is to be filed no less than 21 days before the first CMC.
The budget can only be varied if there has been a significant development, see PD 3E 7.6 below. The rules provide parties should request the consent of their opponent to vary the budget. Only apply to the Court if the opponent does not consent to the variation.
PD 3E 7.6 Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions. Such amended budgets shall be submitted to the other parties for agreement. In default of agreement, the amended budgets shall be submitted to the court, together with a note of (a) the changes made and the reasons for those changes and (b) the objections of any other party. The court may approve, vary or disapprove the revisions, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed.
If a deadline is missed an application must be made immediately to the Court for Relief.
The case of Denton sets out the criteria to be met:
1. The Court will consider whether the breach was serious or significant.
2. The Court will consider why the breach/default occurred.
3. The Court will evaluate all the circumstances of the case so as to enable the court to deal justly with the application (including the factors set out in CPR rule 3.9… the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, Practice Directions and orders).
The Court of Appeal in Denton (para 41-43) made it plain that it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that relief from sanctions will be denied and that they will obtain a windfall strike out or other litigation advantage. In a case where (a) the failure can be seen to be neither serious nor significant, (b) where a good reason is demonstrated, or (c) where it is otherwise obvious that relief from sanctions is appropriate, parties should agree that relief from sanctions be granted without the need for further costs to be expended in satellite litigation. The parties should in any event be ready to agree limited but reasonable extensions of time up to 28 days as envisaged by the new rule 3.8(4).